## Facts

- Ultramercial owned U.S. Patent No. 7,346,545, claiming a method for distributing copyrighted media over the internet where a user receives content for free after viewing an advertisement and the advertiser pays for the content.
- Ultramercial sued Hulu, YouTube, and WildTangent for patent infringement; Hulu and YouTube were dismissed, leaving WildTangent as the appellee.
- WildTangent moved to dismiss under Rule 12(b)(6), arguing the asserted claims were ineligible subject matter under 35 U.S.C. § 101.
- The district court granted the motion and held the asserted claims invalid under § 101.
- After multiple appellate and Supreme Court remands, the Federal Circuit addressed the claims again under the Alice/Mayo framework.

## Issues

1. Whether the asserted claims are directed to an abstract idea under step one of the Alice/Mayo test.
2. If so, whether the claim elements—individually or as an ordered combination—add an inventive concept sufficient to transform the abstract idea into patent-eligible subject matter under § 101.
3. Whether patent eligibility may be resolved on a Rule 12(b)(6) motion without claim construction or factual development.

## Decision

- The Federal Circuit affirmed the district court’s Rule 12(b)(6) dismissal, holding the asserted claims patent-ineligible under § 101.
- The court held the claims are directed to the abstract idea of using advertising as an exchange or currency for access to content.
- The court held the additional limitations (including internet/computer implementation and steps such as logging and controlled access) were routine and conventional and did not supply an inventive concept.
- The court rejected the argument that § 101 could not be decided at the pleading stage, concluding eligibility can be resolved as a matter of law on the claims as pleaded.

## Legal Principles

- Under the Alice/Mayo framework, courts (1) determine whether a claim is directed to a patent-ineligible concept such as an abstract idea, and (2) if so, determine whether additional claim elements transform the claim into a patent-eligible application by supplying an inventive concept.
- Fundamental economic practices, even when performed in a new technological environment, may constitute abstract ideas.
- Merely implementing an abstract idea using generic computer or internet technology does not make the claim patent-eligible.
- Adding routine, well-understood, conventional steps—whether viewed individually or as an ordered combination—does not transform an abstract idea into patent-eligible subject matter.
- Patent eligibility may be adjudicated on a motion to dismiss when the asserted claims, on their face, fail § 101.

## Conclusion

The court held that claims to providing free online media conditioned on viewing an advertisement recite an abstract economic idea and, because they add only conventional internet-based implementation steps, they lack the inventive concept required for patent eligibility under § 101; dismissal at the pleading stage was therefore proper.


Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014)